Friday, 18 March 2016

Business rates: The next big Conservative attack on the north is coming...

The next Conservative attack on the north is coming. It is a big one. Huge.

At the moment all the business rates collected in London and the south are divided up equally across the country. That is fair. We all pay for swanky head offices in London and the South East gets £billions in infrastructure spending, is the centre of lucrative banking industry etc..

They are proposing to scrap that redistribution to councils outside the South East and London. Councils will keep it all. Alarm bells are ringing.

It is no surprise that Lancashire fairs badly and a piece of work commissioned by Hyndburn Labour shows just how bad it is if this scam, another one of Osborne's 'Tory beneficiary schemes' goes through. This after he: - took most local government savings for the north for 9 years running, - gave £300m to southern Tory shires who faced small or no cuts.

The table below looks complicated but isn't.

The average per person spend from national business rates across the UK is £425. If Hyndburn was to  live of it's own business rates that would drop to £246 (Column 4 - Business Rates per head). For Rossendale just £199. We do not generate London levels of business rates - obviously.

Column 2 shoes how much Hyndburn does raise. £19.7 million and that it will lose £14.4 million (column 7 - Central Government shortfall).

Hyndburn proportion of this is 15%, Lancashire County Council 72%, Police 8% and Fire 4%. So further police cuts as well to local councils if this goes through.

What will this mean? Further cuts in local government like emptying the bins every 3 weeks? Or higher business rates in East Lancashire?

Osborne has asked the LGA to review his proposals. We await more cuts.